Whose Home Is It? Amazon? Google? Apple?

on October 1, 2020

In the tech world, September has been synonymous with Apple for many years. Over the past couple of years, however, Amazon has also started to claim the month as its big device reveal. Last year Amazon introduced fifteen new products with Alexa integration and focused on privacy. This year the number of devices was a little lower, and together with privacy, the focus was on sustainability. But that was last week! This week it was Google’s turn to announce a new smartphone, Pixel 5, as well as new smart speakers and Google TV.

Apple’s iPhone event is rumored for mid-October, and the same sources expect the launch of an updated HomePod and an HomePod Mini. So, it might seem unfair to attempt to name who is winning the control of the home before then. Yet what we have seen from Amazon and Google shows enough of a difference in approach to at least attempt to highlight what it would take for Apple to be considered at the same level.

The Core Business

I said before that looking at a company’s core business model will shed light on many of its products and business decisions.  If your business is built on selling hardware, it is more likely that you focus on individuals. If your business is centered on advertising, you are also likely to focus on individuals.

As Prime services started to expand, Amazon has been able to cater to both the individual and the household. This approach seems to be working and can grow to the car, which Amazon clearly sees as an extension of the home. Within a home context, Alexa remains extremely useful, especially since that individual users can choose to register their voice so that Alexa knows who is interacting with it. Alexa can now even join multiple people in a conversation.  The car is no different from the home. The interactions we are likely to have are related to content, navigation, or the car itself, making it reasonably straightforward to deliver value. Out in the world, Amazon and Alexa quickly lose impact as users turn to their phones’ assistant. The recent move into wearables with earbuds, glasses, and fitness bands all aim at addressing this weakness by offering Amazon valuable ways to collect information and provide value when out and about.

As Amazon moves beyond content into services such as home security, health, and even personal care, it starts to lock people into services that are more about delivering a better quality of life, in one way or another, rather than entertainment. This is a similar formula Apple has used for Apple Watch. Providing health benefits has considerably increased the appeal of the device. Apple will continue to find ways to use this aspect of Apple Watch to open the door into its ecosystem as it did with the recently launched Family Setup. Monetization for Apple will come from hardware; however, while for Amazon, the opportunity rests in the services, not the hardware.

Google falls somewhere in between Amazon and Apple by delivering good value for money hardware and services. But the real value is not in the services per se, but the AI, often associated with Google Assistant, that delivers helpfulness. This is possibly Apple’s weakest link both against Amazon and Google. Siri has improved, and it can provide moments of delight like reading your messages when you are wearing AirPods. Yet, across the board, Siri lags both Alexa and Google Assistant. Value is also dependent on what kind of services Apple will embrace. While I expect Apple to continue to get deeper into health and content, I do not expect it to have a wide range of services or penetrate the home with the number of devices we will continue to see from Amazon.

The Phone as an Entry Point to the Home

There are different paths to our homes, but the phone remains the strongest because it is easier to drive value from the outside than the other way around. This is especially true about digital assistants, and while it is not the case right now, most of us spend more time away from their homes. A digital assistant that can always be with me will just be smarter because it will know more about me. The phone is the significant advantage Google and Apple have over Amazon. The phone is the device we interact with the most, creating stickiness and generating data these companies can use to improve my experience with both the device and their services. The phone’s importance does not mean that Amazon cannot play a substantial role in the home. It has clearly demonstrated the opposite thus far. However, it means that Amazon will have to have a broader set of devices to capture our time and interactions and find different hooks for users.

As critical as the phone is to get into the home, more is needed to be useful in a family context, and this is where Apple has to cover more ground. The expansion of Apple TV as an app is helping content. More HomePod models will help music, podcasts, and smart home. HomeKit support on other brands will not be enough for users to connect the dots between the device they are using and Apple. As unsexy as it is, home networking seems an obvious opportunity for Apple considering the firm stand on privacy. I am not sure that when Apple exited that business, it was clear that delivering a networking solution meant providing a digital security and privacy solution not for the home but the family. It might also be interesting to see if Apple believes that delivering more screens to the home should only be done through iPads rather than through a HomePod with a screen.

They say there is strength in numbers. It seems to me that when it comes to the home, strength is in the meaningful interactions a brand can deliver. Whether those interactions are through hardware, software, or services does not matter as long as the user is crystal clear on who is bringing them value.